First impressions aren't always correct - especially in the stock market.
Keep that in mind as 2026 makes its first impressions on Wall Street. If the coming days are anything like those of past years, analysts will try to make the case that the stock market's performance at the beginning of January foretells its full-year direction.
Don't believe them: The stock market's odds of rising in 2026 are the same - regardless of how it performs at the beginning.
It's unclear when Wall Street first began to focus on the predictive power of the stock market's first trading sessions of the year. It goes at least as far back as 1972, which is when Yale Hirsch, the founding editor of the Stock Trader's Almanac, coined the phrase: "If Santa Claus should fail to call, bears may come to Broad and Wall."
Hirsch focused on the trading sessions after Christmas through the first two trading days of January, claiming that bear markets often follow when the stock market declines over that period.
Other analysts have "discovered" similar patterns. Some claim that the stock market's full-year direction is foretold by its performance on the first trading day of January; others focus on the first two days, and still others on the first week. And we shouldn't forget the so-called January barometer, according to which the stock market's direction over the full month of January predicts its direction for the subsequent year.
Not one of these so-called first-impression patterns comes close to satisfying traditional criteria of statistical significance, as you can see from the chart above. To construct it, I focused on the Dow Jones Industrial Average DJIA back to its creation in 1896. Regardless of the period over which the first impression is measured, the stock market's odds of rising over the full year are virtually the same. None of the differences plotted in the chart is significant at the 95% confidence level that statisticians often use when assessing whether a pattern is genuine.
The bottom line? The stock market on average rises in roughly two out of every three years - and these odds don't change because of how it performs in the trading days at the beginning of January.
